LONDON – Losses at DeepMind, the artificial intelligence company owned by Google’s parent company Alphabetrose 1.5% last year, according to its latest annual report.
The London-based AI lab – founded in 2010 by Demis Hassabis, Mustafa Suleyman and Shane Legg – suffered a £477m ($649m) loss in 2019, worse than the £470m loss sterling in 2018, according to documents filed Thursday with the UK’s Companies House register.
The vast majority of DeepMind’s spending in 2019 was on “staff and other related costs”, with the annual report showing around £468m was spent on this, up from £398m in 2018.
DeepMind today employs approximately 1,000 people worldwide, including some of the world’s top AI researchers, who can earn annual salaries of over $1 million. These high profile people, who often have doctorates from Oxford, Cambridge, Stanford or MIT, can get this kind of money because they are also sought after by big tech companies like Facebook, Apple, Amazon and Microsoft. .
A DeepMind spokesperson told CNBC: “During the time period covered by these accounts, DeepMind laid the foundation for our breakthrough results in protein structure prediction – a 50-year grand challenge in biology – and collaborated with teams across Google to make a real impact on escalate.”
“Our teams have been involved in a wide range of projects, from improving the predictability of wind power to accelerating ecological research in the Serengeti. We are delighted to build on this unprecedented progress as that we’re heading into next year,” the spokesperson added.
While losses increased slightly, revenue fell from £103m in 2018 to £266m in 2019. However, revenue comes from other Alphabet companies (namely Google), which pay DeepMind for research and development.
DeepMind was acquired by Google in 2014 for around $600 million. Today, the company relies on a steady flow of capital from parent company Alphabet.
In 2019, Google Ireland waived intercompany reimbursement loans and all accrued interest amounting to £1.1 billiondepending on the file.
DeepMind is based in a large Google building in London’s King’s Cross area, but plans to move into a new office early next year. According to the filing, DeepMind spent £1.3 million on construction, furniture and fixtures, and networking and production equipment in 2019.
The filing also shows DeepMind donated £6.3m to academia in 2019, up from £13.5m in 2018.
In terms of risks and uncertainties, the filing states, “The research and application of machine learning is an emerging market characterized by continuous change and intense competition. As a result, the company will continue to face risks and uncertainties, which may have a significant impact on its ability to achieve continued success in its market.”
Despite the losses, Alphabet has pledged to continue funding DeepMind.
“I’m very pleased with the pace at which our AI R&D is progressing,” Alphabet CEO Sundar Pichai said during the company’s second-quarter earnings call. “And for me, it’s important that we’re on the cutting edge of technology as a company and that we’re ahead. And for me, I’m excited about the pace at which our engineering and R&D teams are working to both at Google and Deep Mind.”
Azeem Azhar, founder of the Exponential View newsletter and podcast, told CNBC, “For me, the question is why aren’t more companies in other industries supporting basic research in exponential technologies like AI, synthetic biology, battery technology, quantum computing, etc. This support can be direct operational funds like Google or it can be corporate or academic partnerships. outside of a few companies (like VW or Bosch) I don’t see that happening.
He added: “You won’t see huge societal returns five years from now, more like 20 or 30 or more. The Intel 4004 was launched in 1970. That was 2001 before half of UK households had a computer.”
